On May 3, 2023, cocoa prices declined significantly, with July ICE NY cocoa closing down by 4.23% at -194 points and July ICE London cocoa down 4.63% at -159 points. This drop followed a recent rally that saw cocoa prices reach a 3.5-month high earlier in the week, driven by concerns over potential production impacts from an expected El Niño weather pattern in West Africa, where cocoa production is concentrated.
The National Oceanic and Atmospheric Administration (NOAA) estimates a 61% chance of El Niño conditions developing between May and July, possibly persisting through year-end. In addition, recent market assessments indicate lower expectations for the 2026/27 West African cocoa crop, and the global cocoa surplus forecast for that period has been reduced from 267,000 MT to 149,000 MT by StoneX. Meanwhile, Nigerian cocoa exports dropped 35% year-over-year in March, while the ivory coast reports stable supplies, with current shipments at 1.57 million MT, up 0.6% from last year.
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